Asian Stocks Climb; Dollar Edges Lower, Yen Gains:
- Japan’s 10-year yield rises above BOJ’s ceiling for second day
- Emerging-market and G-10 currencies reflect risk-on sentiment
Asian shares started the week higher with a tailwind from US stocks closing at the highest in a month as easing inflation expectations fuel January’s global share rally. The dollar declined.
Equity futures for the S&P 500 climbed, along with those for Europe, and a benchmark of Asian shares rose about 0.5%. Japan painted a different picture with stocks trading lower as the yen’s rebound continued to weigh on exporters.
Investors also remain on guard for another surprise from the Bank of Japan when it sets policy on Wednesday. The yen strengthened and Japan’s benchmark 10-year bond yield climbed above the top of the BOJ’s ceiling for a second day.
The greenback was down against both emerging-markets and Group-of-10 currencies amid bets that the Federal Reserve will slow the pace of interest-rate hikes. Australia’s dollar strengthened above 70 cents for the first time since August, a reflection of improved appetite for riskier assets.
Bitcoin traded above $21,000 following a rebound over the weekend, when it surged amid optimism that it may have bottomed.
Key events this week:
- Earnings this week are scheduled to include: Charles Schwab, Discover Financial, Goldman Sachs, HDFC Bank, Interactive Brokers, Investor AB, Morgan Stanley, Netflix, Procter & Gamble, Prologis, State Street
- World Economic Forum’s kicks off in Davos, Monday
- US markets closed for Martin Luther King Jr. Day, Monday
- China retail sales, industrial production, GDP, Tuesday
- US Empire State manufacturing survey, Tuesday
- Fed’s John Williams to speak, Tuesday
- Eurozone CPI, Wednesday
- US retail sales, PPI, industrial production, business inventories, MBA mortgage applications, cross-border investment, Wednesday
- Bank of Japan rate decision, Wednesday
- Federal Reserve releases Beige Book, Wednesday
- Fed speakers include Raphael Bostic, Lorie Logan and Patrick Harker, Wednesday
- US housing starts, initial jobless claims, Philadelphia Fed index, Thursday
- ECB account of its December policy meeting and President Christine Lagarde on a panel in Davos, Thursday
- Fed speakers include Susan Collins and John Williams, Thursday
- Japan CPI, Friday
- China loan prime rates, Friday
- US existing home sales, Friday
- IMF’s Kristalina Georgieva and ECB’s Lagarde speak in Davos, Friday